Govt’s vigorous privatization plan

ISLAMABAD: The PML (N) led government is heavily relying upon pursuing vigorous privatization plan by off-loading shares of 32 public sector enterprises and handing over management control into hands of buyers in the first phase under IMF’s conditions.

In the calendar year 2014, the government seems interested to off-load shares of 10 to 12 institutions including national flag carrier PIA. But first of all the Privatization Commission is awaiting approval of PM Nawaz Sharif for constitution of its 10-member Board. A summary to this effect has already been moved to PM.

The government claims that there has been no other option but to privatize these state owned enterprises in order to stop cash bleeding of over Rs 500 billion on annual basis. But the challenge for the government is to ensure transparency in the process of transaction of privatization and put in place best regulatory mechanism to dismantle monopolies in the post privatization period.

As experience in the past on privatization front is not satisfactory keeping in view transaction of Karachi Electric Supply Corporation (KESC) or even PTCL where lacunas existed in the complex legal language of the deal giving space to parties concerned to interpret in accordance with their own liked version that triggered legal battle for indefinite period.

So there is a lesson for the incumbent regime that first of all transparency should not be compromised in the transaction by ensuring fair valuation of assets of the units, removing perception that liked ones would be the potential buyers at throw-away prices, placing an effective regulatory framework to discourage monopolies in post privatization period and create competitive environment to make this process successful.

“We do not want converting public sector monopolies to private sector monopolies,” said Minister of State for Privatization Khurram Dasgir Khan while briefing reporters this week. He said that the actions of the government would demonstrate that they were serious about privatization process in a fair manner having no vested interest with an aim to ensure better service delivery for people of Pakistan.

Since 1991 when privatization process had started in the country, total 167 transactions were done that fetched Rs 476 billion or $5 billion.